SEC filing review: what changed in Clearwater's filings before its take-private

You are the associate on a fund looking at Clearwater Analytics (NYSE: CWAN). On December 20, 2025, Permira and Warburg Pincus agreed to take it private at $24.55 a share in cash, $8.4 billion of enterprise value and 47.1% above the $16.69 unaffected price of November 10. The bankers’ decks and the merger proxy tell you what the buyers paid. Your job is to find what the company’s own filings say changed on the way there, and on which page.

We gave Compound Clearwater’s filings from its September 2021 IPO to the June 2026 close: the 424B4 prospectus, five 10-Ks, the 10-Qs, the 8-Ks and the merger proxy. Every table below is from that one run, cut to the rows that matter, and every page number is the printed page of the filing.

A 10-K is the audited annual report, with the risk factors, MD&A, financial statements and the controls report. A 10-Q is its unaudited quarterly version. An 8-K reports a material event within four business days: a deal signed, a debt facility, a vote. A DEFM14A is the definitive merger proxy, and on a take-private its Background of the Merger is the only public record of the negotiation. Reviewing one filing tells you what the company says. Reviewing all of them in order tells you what it stopped saying.

10-K risk factor changes: from controlled company to merger target

The risk factors trace Clearwater from a sponsor-controlled IPO to a company being sold.

Compound compared the summary risk factors at the front of each 10-K, the Item 1A section headings and the wording of the risks that recur. Its answer is open about the limit: the PDFs merge headings into paragraphs, so it did not run a full heading-by-heading diff of every risk.

Three threads run through the table. The sponsors fade: the FY2023 10-K says the Principal Equity Owners have “significant influence over us, including control over decisions that require the approval of stockholders” (p. v), the FY2024 10-K says “influence” (p. v), and the FY2025 10-K drops the risk and calls them the Prior Principal Equity Owners. The revenue model widens: fees on client assets go from the “vast majority” of revenue (FY2022, p. iv) to the “main portion” (FY2024, p. v), and the FY2025 summary adds “user fees, connectivity fees, market data fees, and managed service fees” (p. iv). And the company becomes a target: four Merger risks open the FY2025 summary, starting with “if our proposed Merger does not close, or is delayed” (p. iv).

Takeaway: the risk factors record the sponsors’ exit and the take-private a year apart, and the fee language records Enfusion changing what Clearwater sells.

Risk factors describe a business in words. The numbers that changed with it are in the KPI section.

KPI disclosure: what ARR and retention include after Enfusion

The KPI definitions stayed the same in 2025, but what they measure did not.

Clearwater defines annualized recurring revenue as recurring revenue in the last month of the period, divided by the days in the month and multiplied by 365 (FY2025 10-K, p. 47). The definition did not change in 2025. What changed is that the 2025 acquisitions were now inside it, and the 10-K gives the acquired entities’ share in a sentence below the table.

The same caution applies to retention. The 10-K’s business section says net revenue retention “reached 109%” in Q4 2025 (p. 10). The MD&A adds that from the second quarter of 2025 the rates include the acquired entities, and that without them net retention was 114%, 112% and 113% in the second, third and fourth quarters (p. 48). The drop from 116% to 109% is mostly mix. Core retention fell three points.

Gross retention shows how a sentence can change while the number stays put.

The missing quarter is in the FY2025 10-K’s retention table: 97% in the first quarter of 2023 (p. 48).

Takeaway: Clearwater’s headline ARR and retention both mix in the acquisitions from 2025, so the organic picture is ARR up about 17.7% and core net retention at 113%.

The KPIs say how fast the business grew. The controls sections say how far the numbers were tested.

Controls and audit matters: what the auditor flagged

The controls disclosures changed in each of the last three 10-Ks.

The FY2023 10-K found a material weakness in the IT general controls over the invoicing systems and concluded that disclosure controls were not effective at December 31, 2023 (pp. 99–100). Management reported it remediated in the quarter ended December 31, 2024 (FY2024 10-K, p. 99). A year later, the FY2025 assessment left out Enfusion and Beacon, which held about 23% of total assets excluding goodwill and 27% of revenue (p. 105). The SEC allows that exclusion in the year of an acquisition.

The audit matters follow the tax story. The FY2024 auditor’s report tests the realizability of $625 million of deferred tax assets (p. 62). Those assets sit behind the $457.6 million income tax benefit that turned a loss before taxes into $427.6 million of 2024 net income (p. 91). In FY2025 the new audit matter is the fair value of Enfusion’s and Beacon’s developed technology, $400 million and $130 million (p. 64).

Takeaway: the controls were clean for one year, between the remediation and the acquisitions, and the largest profit line of 2024 was a tax item.

Those deferred tax assets are also where the sponsors’ and the buyers’ interests meet.

Sponsors, the TRA and the Tax Attributes

Permira and Warburg Pincus sold down, settled their tax receivable agreement and came back as buyers.

At the IPO, Welsh Carson, Permira and Warburg Pincus held about 60.6%, 18.1% and 18.1% of the voting power, about 97% together (DEFM14A p. 29). From 2023 they sold in underwritten secondary offerings. The proxy’s table lists every sale.

Permira and Warburg Pincus sold $1.01 billion of stock between November 2023 and November 2024, and the three sponsors $2.47 billion. Both fell below the threshold for board nomination rights in the third and fourth quarters of 2024. By the proxy date Permira owned no shares and Warburg Pincus 0.3%, though each still had a director on the board, Andrew Young and Cary Davis (DEFM14A p. 29). Calling them former sponsors is accurate for ownership, not for the boardroom.

The same month as the last sale, the company settled its tax receivable agreement. Before the amendment, the TRA paid 85% of certain tax benefits to affiliates of the sponsors and other pre-IPO holders (DEFM14A p. 174). On November 4, 2024 Clearwater agreed one-time payments of about $72.5 million, including about $3.3 million of TRA bonus payments to executive officers, after which the TRA parties have no further rights to payments (FY2024 10-K, p. 44). The tax benefits then stayed with the company, and with whoever owned it.

The merger proxy prices them. Management’s forecast calls them the Tax Attributes and estimates their free cash flow benefit by year (DEFM14A p. 69).

Management put the benefit at about $40 million in 2026, rising to $123 million in 2030. Both banks counted it, in different ways. PJT Partners used free cash flow net of the Tax Attributes (p. 69, note 7). J.P. Morgan used free cash flow without them, then added the present value of the Tax Attributes used from 2026 to 2032, $1.45 to $1.50 a share, to reach its $20.25 to $31.25 DCF range (p. 83).

Takeaway: the buyers sold stock at up to $29.11, took their TRA settlement and bought back in at $24.55 with the tax benefits the settlement freed, which both banks put in their DCFs.

The proxy also records how the $24.55 was reached.

The take-private in the merger proxy and 8-Ks

The signed price was five cents above the buyers’ first bid.

The proxy reads like a negotiation that ended where it began. On December 16, Warburg Pincus called the Special Committee chair to explain the cut, “including their views regarding the growth assumptions underlying the Financial Forecasts” (p. 48). That day PJT Partners reported that Sponsor Party C would not finance a deal above $24.00 (p. 48). The committee countered at $24.55 with a go-shop to February 1, 2026. The consortium took the price on condition that the go-shop end on January 23 and that the company not solicit the parties from the pre-signing market check, even during the go-shop (p. 49).

The 8-Ks finish the record. The merger agreement 8-K of December 22, 2025 sets a $111.67 million termination fee for a superior proposal found in the go-shop, $241.95 million in other cases, and a $521.13 million reverse termination fee. The 8-K of January 23, 2026 says the advisers solicited 44 parties, 20 financial sponsors and 24 strategics. Six signed confidentiality agreements and none made a proposal.

One more item appears only in the proxy. A stockholder derivative suit names Welsh Carson (p. 37) and five directors, including Davis and Young, and the merger may extinguish it (p. 110). The plaintiff alleged about $82 million of damages, which the Special Committee called less than 1% of enterprise value and immaterial to the deal (p. 50). The FY2025 10-K’s Legal Proceedings item (p. 39) and the Q1 2026 10-Q (p. 38) both keep the standard sentence that no litigation is expected to be material.

Takeaway: the price was set by the buyers’ opening bid, and the market check that followed was a go-shop with the pre-signing bidders shut out.

What the filings say about the take-private

Compound put the five changes on one page for the investment committee.

Read in order, the filings tell one story. The sponsors gave up control in 2024 and settled the TRA. The company bought Enfusion and Beacon in 2025, which lifted ARR and retention and took a quarter of revenue outside the tested controls. Then two of the sponsors bought the company at five cents above their own first bid, and the Tax Attributes the TRA no longer shared out came with it. None of this says the price was unfair, and both banks found it fair. It tells you which questions to bring to the valuation and the DCF: how much of the growth is acquired, what the Tax Attributes are worth, and how hard the price was tested. The earnings call analysis sets the same period against what management said in public.

FAQ